8/7/2019 COMMAND & MARKET ECONOMY

1/1

COMMAND ECONOMY

A planned economy (also known as command economy and centrally planned economy) is an economic syste

which the state orgovernmentcontrols the factors of production and makes all decisions about their use and aboutdistribution of income.[1] In such an economy, the planners decide what should be produced and direct enterprises

produce those goods.[2] Planned economies are in contrast to unplanned economies, i.e. a market economy, where

production, distribution, and pricing decisions are made by the private owners of the factors of production based utheir own interests rather than upon furthering some overarching macroeconomic plan.

A planned economy may either consist of state owned enterprises, private enterprises who are directed by the state

combination of both. Though "planned economy" and "command economy" are often used as synonyms, some ma

the distinction that under a command economy, the means of production are publicly owned. That is, a plannedeconomy is "an economic system in which the government controls and regulates production, distribution, prices,

[1] but a command economy, while also having this type of regulation, necessarily has substantial public ownersh

industry. [2] Therefore, command economies are planned economies, but not necessarily the reverse (example: NaGermany's private ownership yet use of the Four Year Plan could construe them as a planned economy, but not

necessarily a command economy, while the Soviet Union with public ownership would be a command economy).

Important planned economies that existed in the past include the economy of the Soviet Union, which was for a tim

the world's second-largest economy. Beginning in the 1980s and 1990s, many governments presiding over planneeconomies began deregulating and moving toward market based economies by allowing the private sector to make

pricing, production, and distribution decisions. Although most economies today aremarket economiesormixed

economies, planned economies exist in some countries such as CubaandNorth Korea.[3]

MARKET ECONOMY

A market economy (also called a free market economy or a free enterprise economy) is an economic system in wthe production and distribution ofgoods and services takes place through the mechanism offree marketsguided b

free price system.[1][2]In a market economy, businesses and consumers decide on their own volition what they willproduce. Technically this means that the producer gets to decide what to sell, what to charge, etc., and not the

government. This is often contrasted with a planned economy, in which government decides what will be produce

in what quantities.[3]

No pure market economy exists. Thus, almost all economies in the world today are mixed economies which combvarying degrees of market and command economy traits. For example, in the United States there are more market

economy traits than in Western European countries.[4]

The theoretical model of a large-scale free market economy does not occur legally, however the underground econmay be seen as an actualized free market economy

http://en.wikipedia.org/wiki/Economic_systemhttp://en.wikipedia.org/wiki/Statehttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Command_economy#_note-0%23_note-0http://en.wikipedia.org/wiki/Command_economy#_note-1%23_note-1http://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Macroeconomichttp://dictionary.reference.com/browse/planned%20economyhttp://www.m-w.com/dictionary/command%20economyhttp://en.wikipedia.org/wiki/Nazi_Germanyhttp://en.wikipedia.org/wiki/Nazi_Germanyhttp://en.wikipedia.org/wiki/Nazi_Germanyhttp://en.wikipedia.org/wiki/Nazi_Germanyhttp://en.wikipedia.org/wiki/Four_Year_Planhttp://en.wikipedia.org/wiki/Economy_of_the_Soviet_Unionhttp://en.wikipedia.org/wiki/Economy_of_the_Soviet_Unionhttp://en.wikipedia.org/wiki/1980http://en.wikipedia.org/wiki/1990http://en.wikipedia.org/wiki/Market_economieshttp://en.wikipedia.org/wiki/Market_economieshttp://en.wikipedia.org/wiki/Market_economieshttp://en.wikipedia.org/wiki/Mixed_economieshttp://en.wikipedia.org/wiki/Mixed_economieshttp://en.wikipedia.org/wiki/Mixed_economieshttp://en.wikipedia.org/wiki/Cubahttp://en.wikipedia.org/wiki/Cubahttp://en.wikipedia.org/wiki/North_Koreahttp://en.wikipedia.org/wiki/North_Koreahttp://en.wikipedia.org/wiki/Command_economy#_note-2%23_note-2http://en.wikipedia.org/wiki/Economic_systemhttp://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Servicehttp://en.wikipedia.org/wiki/Free_markethttp://en.wikipedia.org/wiki/Free_markethttp://en.wikipedia.org/wiki/Free_markethttp://en.wikipedia.org/wiki/Free_price_systemhttp://en.wikipedia.org/wiki/Market_economy#_note-0%23_note-0http://en.wikipedia.org/wiki/Market_economy#_note-1%23_note-1http://en.wikipedia.org/wiki/Market_economy#_note-1%23_note-1http://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Market_economy#_note-2%23_note-2http://en.wikipedia.org/wiki/Mixed_economyhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Western_Europehttp://en.wikipedia.org/wiki/Market_economy#_note-3%23_note-3http://en.wikipedia.org/wiki/Underground_economyhttp://en.wikipedia.org/wiki/Economic_systemhttp://en.wikipedia.org/wiki/Statehttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Command_economy#_note-0%23_note-0http://en.wikipedia.org/wiki/Command_economy#_note-1%23_note-1http://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Macroeconomichttp://dictionary.reference.com/browse/planned%20economyhttp://www.m-w.com/dictionary/command%20economyhttp://en.wikipedia.org/wiki/Nazi_Germanyhttp://en.wikipedia.org/wiki/Nazi_Germanyhttp://en.wikipedia.org/wiki/Four_Year_Planhttp://en.wikipedia.org/wiki/Economy_of_the_Soviet_Unionhttp://en.wikipedia.org/wiki/1980http://en.wikipedia.org/wiki/1990http://en.wikipedia.org/wiki/Market_economieshttp://en.wikipedia.org/wiki/Mixed_economieshttp://en.wikipedia.org/wiki/Mixed_economieshttp://en.wikipedia.org/wiki/Cubahttp://en.wikipedia.org/wiki/North_Koreahttp://en.wikipedia.org/wiki/Command_economy#_note-2%23_note-2http://en.wikipedia.org/wiki/Economic_systemhttp://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Servicehttp://en.wikipedia.org/wiki/Free_markethttp://en.wikipedia.org/wiki/Free_price_systemhttp://en.wikipedia.org/wiki/Market_economy#_note-0%23_note-0http://en.wikipedia.org/wiki/Market_economy#_note-1%23_note-1http://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Market_economy#_note-2%23_note-2http://en.wikipedia.org/wiki/Mixed_economyhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Western_Europehttp://en.wikipedia.org/wiki/Market_economy#_note-3%23_note-3http://en.wikipedia.org/wiki/Underground_economy